Iberdrola plans €14B investment in UK electricity grid infrastructure
Iberdrola’s British subsidiary, ScottishPower, has secured approval from the UK energy regulator, Ofgem, to move forward with an unprecedented investment of approximately €14 billion in the country’s electricity networks. This ambitious plan, running through 2031, focuses primarily on enhancing interconnection infrastructure between Scotland and England as well as Wales. It marks a historic milestone for Iberdrola, representing the largest single investment initiative ever undertaken by the company.
The approval comes as part of Ofgem’s new regulatory framework for electricity transmission assets known as RIIO-T3, which defines the operational and financial principles that will govern the transmission system from 2026 through 2031. The framework, finalized after nearly two years of extensive consultation with stakeholders across the sector, is designed to support the UK’s clean energy transition and ensure that energy networks can keep pace with rapidly evolving electricity needs.
Largest Network Investment in Iberdrola’s History
Iberdrola stated that this new investment program will more than triple the spending undertaken in the most recent regulatory period. This dramatic scale-up aligns closely with the UK government’s Clean Power 2030 Plan, which outlines major electrification objectives intended to drive decarbonization across the nation’s energy system.
As demand for clean electricity accelerates — powered by electric vehicles, renewable energy deployment, data centers, and electrification of industry — the UK’s network operators face growing pressure to expand, modernize, and strengthen grid infrastructure. Iberdrola’s plan positions ScottishPower as a leading contributor to this transformation.
Major Subsea Cable Projects to Strengthen UK Interconnection
At the heart of the newly approved investment package are three major high-voltage direct current (HVDC) interconnector projects. They include:
- Eastern Link 1
- Eastern Link 4
These two subsea cables will run between Scotland and England, significantly increasing the ability to send renewable generation southward from areas with abundant wind power resources. A third cable, Western Link 2, will provide an additional subsea connection between Scotland and Wales.
Together, the three systems will provide more than 500 kV of power capacity and span approximately 1,100 kilometers of underwater cable. The deployment will also require the construction of six new converter substations, which serve as critical nodes for transforming and stabilizing transmitted power. These connectors are expected to enhance flexibility, enable large-scale offshore wind integration, and reduce the current bottlenecks that limit energy transfer between regions.
By improving north–south transmission capability, these subsea links will help ensure that renewable energy generated in Scotland — home to some of Europe’s strongest wind resources — can reach population centers and industrial hubs across England and Wales.
Economic Growth, Energy Security, and Consumer Benefits
In addition to reinforcing system reliability and advancing decarbonization, Iberdrola highlights strong economic benefits associated with the program. The company estimates that once deployed, the investments will:
- Create approximately 12,000 jobs across the supply chain
- Contribute around €2.3 billion per year to the UK economy
- Support new industrial activity in regions benefiting from grid enhancements
ScottishPower has already begun executing a procurement strategy worth more than €6 billion to secure partnerships with equipment manufacturers, contractors, and technology suppliers. This focus on domestic value creation aligns with the UK’s broader industrial strategy to expand clean-energy–related employment.
Consumers are also expected to benefit. As renewable energy capacity increases, constraints on the current grid have forced the system operator to curtail wind generation and purchase alternative power — costs that ultimately flow into electricity bills. The planned transmission reinforcements are designed to minimize these inefficiencies, boosting affordability over time.
UK Leads Iberdrola’s Global Investment Roadmap
The approval reinforces the UK’s status as Iberdrola’s most important international market. Between 2025 and 2028, the company plans to commit €20 billion to UK initiatives, with electricity grid infrastructure representing the majority of this investment. ScottishPower remains central to Iberdrola’s global strategy as the company expands its role in shaping the clean energy transition in advanced economies.
The move also aligns with ambitious national goals: the UK has committed to decarbonizing its electricity system, boosting energy security, and accelerating the shift away from fossil fuel dependency. Interconnection and grid expansion are considered essential for ensuring that renewable generation can be effectively harnessed and delivered to consumers when and where it is needed.
Leadership Perspective: Enabling a Clean Energy Future
Ignacio Galán, Executive Chairman of Iberdrola, praised the approval, emphasizing both the scale of the plan and the clarity of strategic alignment between the company and policymakers.
“The increase in electricity demand in all industries, driven by more activity and the electrification of power use, requires huge investments in new infrastructure,” Galán stated. “This plan, the largest ever Iberdrola has undertaken, is the end result of a clear energy policy on the part of the British government and constructive dialogue with the regulator, and will enable us to continue building modern, flexible and resilient grids that allow us to meet growing demand, guarantee energy security and include more clean energy.”
His remarks reflect growing momentum behind electrification efforts globally. The United Kingdom in particular has taken a leading role in advancing climate commitments through regulatory frameworks designed to unlock private investment in clean infrastructure.
A Foundation for Long-Term Transformation
As renewable power and electrified technologies play an expanding role in everyday life — from transport to heating to digital infrastructure — the need for strengthened electricity networks becomes ever more critical. Iberdrola’s newly approved investment plan represents a major response to that challenge, promising a step-change in system capability and resilience.
By building new subsea interconnectors, enabling more renewable energy to reach consumers, and supporting jobs and investment across the supply chain, ScottishPower and Iberdrola are positioning themselves at the forefront of a new era in the UK’s energy system.
This initiative signals not only a business milestone for Iberdrola but also a broader shift toward a more sustainable, secure, and forward-looking energy infrastructure for the United Kingdom.
Source Link: https://www.iberdrola.com/
